Top 10 Missed Tax Deductions

It’s tax time again, and sadly, many of us are going to miss out on thousands of dollars of deductions. We’ve compiled a list of the most commonly missed deductions, so you don’t have to pay the ATO any more than is required.

You need to be able to justify your deductions. The easiest way to do this is with a receipt. An original receipt is great, but a good-quality electronic version is fine too. Get into the habit of taking receipt photos with your phone, and that way you’ll never lose a receipt. For a lot of expenses, a diary can be an acceptable form of evidence. In general, you don’t have to keep it for the whole year; one to three months is usually sufficient.

Disclaimer: You will read tips below but not tax advice. While we believe the details to be accurate, we encourage you to see a tax agent—their fees are tax deductible as well.

10. Sun Protection

If your job requires you to work outdoors, then you can claim sun protection equipment, including hats, sunscreen and sunglasses.

9. Self-Education Expenses

Did you complete any courses for work? Did you participate in any ongoing professional development? Did you buy a magazine or pay to read an Internet article related to work? All of these activities are tax deductable. You can even claim travel expenses to go to conferences.

8. Charity

How many times have you given someone a donation and then thrown it away or lost the little tax invoice? Maybe you give monthly to a charity but forget to include it in your tax records?

7. Internet and Mobile Phone

If you use your mobile phone and home Internet for work purposes, then you can claim these expenses to the extent that you use them for work. You need to be able to show how you calculated the amount of use. If you print out one month’s phone bill and calculate the percentage of work-related calls, you can use this proportion for the year. For more details, see: https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Deductions-for-specific-industries-and-occupations/Mechanics—claiming-work-related-expenses/?page=9

6. Work-related vehicle expenses.

If you drive your vehicle for any work-related purpose, then you can claim it on your taxes. You cannot claim your commute, but after you arrive at work, you can claim the rest of your daily trips that you make within working hours. You don’t need written evidence, but you need to be able to show how you worked out your expenses (e.g. keeping a diary). See this link for more details: http://calculators.ato.gov.au/scripts/axos/help/car1.htm

4. Tools and Materials

Any tools or materials that you bought (e.g. post-it notes, pens and pencils, wrenches and rulers) are tax deductible. Teachers are big offenders here, spending it up big at Officeworks but forgetting to claim. Likewise, tradies’ emergency trips to Bunnings can lead to missed tax claims.

3. Income Protection Insurance

Claim any income protection insurance as a tax deduction. You cannot make this claim for a policy that compensates you for physical injury, etc., only lost income. Also, you can’t claim this type of insurance if it comes out of your superannuation.

2. Trading Commuting Deduction

If you’re a tradie and you can’t keep your tools safe on site, then you can claim your work commute as a tax deduction if your tools weight more than 20kg.

1. Home Office Deduction

If you work from home, then you can claim a home office deduction of 34 cents per hour. You need at least one months’ record of a work diary to be able to justify this.

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